Govt asks Uber, Ola to calculate fares using taxi meters

"Taxi aggregators are currently violating the law by measuring distance through GPS," a top road ministry official told ET. "The Motor Vehicles Act clearly says that they have to go by the taxi meter."ET Bureau | July 30, 2016, 09:07 IST

NEW DELHI: Uber and Ola have been asked by the government to start calculating fares using taxi meters rather than GPS as they are doing now.

"Taxi aggregators are currently violating the law by measuring distance through GPS," a top road ministry official told ET. "The Motor Vehicles Act clearly says that they have to go by the taxi meter."

The ministry's reasoning is that distance estimated by GPS is not accurate enough, according to the feedback it's been getting. "We have told both Ola and Uber during the recent meetings that they have to fix this problem immediately," the official said.

"We keep getting complaints of inaccuracies in the fare mechanism of these cab aggregators."

GPS, or global positioning system, measurements on phones are arrived at through a combination of data from satellites, cell sites and WiFi.

GPS and similar systems are indispensable navigational aids in military and civilian applications, including Google Maps.

The transport ministry believes the black-and-yellow taxi rate card is better for consumers. The aggregator apps depend heavily on GPS-based mapping systems, starting with booking a vehicle to calculating the fare at the end of the ride. Drivers also use them as destination guides.

Transport ministry officials recently held meetings with senior executives of Ola and Uber separately. Uber declined to comment and Ola did not respond to email queries sent by ET. Earlier this week, Roads Minister Nitin Gadkari told Rajya Sabha that his ministry was working on comprehensive guidelines to bring taxi aggregators under greater regulatory supervision.

Gadkari said legislation would soon be introduced to cover such companies, which have emerged as a threat to the black-and-yellow cabs and auto-rickshaws.

Auto and taxi operators in the Capital went on a three-day strike that ended Thursday, opposing what they said were the illegal operations of Ola and Uber, leaving commuters in the lurch. People arriving at airports and railway stations were stranded without public transport. The operators demanded that aggregators should be brought under the ambit of the law and follow government-prescribed fares.

The government has formed a committee under Roads Secretary Sanjay Mitra to draw up guidelines for taxi aggregators and has also received inputs for these from the states. The ministry has also asked states to set an upper fare limit, which is expected to provide policy clarity to these rapidly expanding companies. The state governments have been asked not to fully regulate pricing but set the maximum fare aggregators can charge. Under this cap, aggregators are free to price services, ensuring that the customer is not denied the benefit of competition.

The traditional cabs currently charge Rs 25 for the first km and thereafter Rs 16 per km. There’s an additional night charge of 25 per cent between 11 pm and 5 am. Autos charge Rs 25 for first 2 km and thereafter Rs 8 per km and a 25 per cent additional night charge.

Companies such as Delhi-based Precision Electricals and Sansui Electronics are among the companies that manufacture government-approved digital taxi meters.

The base fare for Ola and Uber is around Rs 7-8 per km which keeps fluctuating with demand. At peak times, surge pricing can be as much as Rs 24 per km. They have time charges of Rs 1 per minute as well.

As in other countries, aggregators have made rapid gains in India but have riled consumers, governments and incumbents over matters such as surge pricing and regulatory issues. The aggregators have said they are willing to work with authorities to resolves differences and say they are in compliance with rules.

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